S.E.C. Sues 6 Former Top Fannie and Freddie Executives
The Securities and Exchange Commission has brought civil actions against six former top executives at the mortgage giants Fannie Mae andFreddie Mac, saying that the executives did not adequately disclose their firms’ exposure to risky mortgages in the run-up to the financial crisis.
The case is one of the most significant federal actions taken against top executives at the center of the housing bust and ensuing financial crisis. Fannie Mae and Freddie Mac have been lightning rods in Washington as symbols of the excessive risk-taking that pushed the country into an economic downturn.The agency filed complaints on Friday in the United States District Court in Manhattan against three former executives at Fannie Mae – its chief executive, Daniel H. Mudd; chief risk officer, Enrico Dallavecchia; and executive vice president, Thomas A. Lund.Freddie Mac’s former chief executive, Richard F. Syron; Patricia Cook, its chief business officer; and its executive vice president, Donald J. Bisenius, were also named in a separate complaint.“Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was,” Robert Khuzami, the head of enforcement for the S.E.C., said in a statement. “These material misstatements occurred during a time of acute investor interest in financial institutions’ exposure to subprime loans, and misled the market about the amount of risk on the company’s books. All individuals, regardless of their rank or position, will be held accountable for perpetuating half-truths or misrepresentations about matters materially important to the interest of our country’s investors.”
No comments:
Post a Comment